Even though Android is now a monster that cannot be stopped, I have a few new and old thoughts on the newest AAPL sensation, the iPad, as well as on AAPL itself.
Is it possible that the iPad could be a market share category killer like the iPod was? And maintain something like an 80% plus market share?
Did you know that even while many analysts estimates (for AAPL) seem less attainable all the time (a primary concern of mine), the consensus growth for EPS is only 17.3% and revenues only 16.5%?
The iPad will see much stronger enterprise acceptance than the iPhone.
Stiff competition will emerge with ultra compelling designs, but my early estimate (through 2013) is that the rest of the "field" will be fighting for half of the pie as AAPL will have the other half.
As stated some time back, the iPad will be a tremendous sales tool in the field. Moreover, those without one will fear a lower close rate.
The iPad is the Swiss army knife of electronics. It combines entertainment, lifestyle management and business/computing mobility. It's a lifesaver on a vacation as it's multiple devices in one. Heck, it's a great remote control. For those with Comcast you must try the Xfinity app for the DVR controls.
How many per house? Will the iPad (and/or tablets) be like cars where the industrial world owns about 2 per household, or is this a multi-product item like TV's where they are found in the majority of the rooms?
Amazingly, we are not yet seeing this product cannibalize Mac's and Macbook's. Unlike many others, I do see this occurring in time but this might not be a major negative as the iPad lifecycle is much shorter - resulting in multiples of product turnover vs. Mac's.
All of this sets AAPL up for additional catalysts and revenue streams from content distribution/management and more surprises from a product standpoint.
All of this is causing me to re-think my long held AAPL target for the low-mid $400's. Central to this is my belief that AAPL could and should trade at or above a PEG ratio of 1 after stripping out cash. Even at a PEG of 1, that is far from a premium valuation for one of the premium growth stocks on the planet. Currently AAPL's PEG (less cash) is .7, so a move to 1 would put AAPL firmly at my old target. A move to 1.15-1.25 would put AAPL's shares well into the $500's.
For comparison, and disallowing for cash, FFIV's PEG is at 1.7 and AMZN's at 2.7 -- vs. AAPL at .85.